Despite the impact and influence of COVID-19 epidemic, deglobalization, and other unfavorable factors, another form of international trade is still full of vitality: cross-border digital eCommerce is gradually becoming a key way to revitalize global consumption, guarantee the supply of materials for production and living, and inject new energy into China's foreign trade.
Despite the severe drop in global foreign trade, import and export volume through cross-border e-commerce customs platforms increased by 52.8% in the first three quarters of this year, reaching 187.39 billion yuan. According to Ebrun’s calculations, in addition to the customs statistics, China'scross-border eCommerce retail exports also exceeded 1 trillion yuan this year.
Cross-border eCommerce is the backbone of China's new cross-border trade format, and millions of sellers are playing an active role in promoting the transition from "Made in China" to "IntelligentManufacturing in China." In the meanwhile, cross-border financial services,logistics, and other industry chain participants are playing increasingly important roles helping Chinese sellers take to the sea and deliver goods to global customers.
The "Upsurge of Qiantang · Digital Silk Road" & 5thGlobal Cross-border eCommerce Summit was held in Hangzhou from November 24-25. Following extensive in-depth research on the status of China's cross-border e-commerce channels and demand for cross-border financial services, ebrun released the Cross-border eCommerce Financial ServiceReport 2020 at the summit, sketching a clear industry map for the market.
According to the data, as one of the most frequent daily operation links of cross-border eCommerce enterprises, more than half of Chinese sellers choose third-party tools as their main means of payment, among which LianLian Pay’s brand familiarity and usage rank first in the market.
Cross-border exports are still expected to show positive growth despite COVID-19 pandemic
Due to the pandemic, a large number of overseas supermarkets went bankrupt and shut down this year, which has forced traditional retail consumption to accelerate its networking and digital transformation. While international trade has been severely hit by the epidemic, cross-border eCcommerce has unique advantages in models and format, and has become an important channel to connect Chinese manufacturing with global consumption, and a new engine forChina's foreign trade.
Relevant state authorities are constantly introducing favorable policies to accelerate development of the industry. In May of this year, theState Council approved 46 cross-border e-commerce comprehensive pilot areas,expanding the total number to 105. Thereafter, the central government proposed a"Domestic and International Dual-circulation Development Pattern." InJune, the General Administration of Customs added two regulatory codes, 9710and 9810, corresponding respectively to cross-border eCommerce B2B and overseas warehousing.
The effect of these policies has been fully validated in the market.According to the survey data, about 80% of cross-border export sellers predict further export growth in 2020, and they were significantly more optimistic about growth in the second half than in the first half.
Ebrun argued that in the long run, a global multi-platform and multi-site layout will become the core market strategy for Chinese cross-border enterprises. In the future, besides mature markets such as North America andEurope, another important expansion direction for sellers will be emerging markets such as Southeast Asia, Middle East and Latin America. With the rise of local eCommerce platforms in different countries and regions, new opportunities will be created for Chinese manufacturers to supply foreign sellers.
Over50% of sellers prefer third-party tools for payment, and the brand familiarity and usage of LianLian Pay rank first in the market
With the rapid rise of new cross-border eCommerce models and formats, various services such as cross-border payments, foreign exchange settlement, financing,loans, and insurance have emerged. These services not only meet the requirements of cross-border eCommerce enterprises for specialized, customized,and diverse cross-border financial services, but also enrich China'scross-border eCommerce ecosystem.
The cross-border export eCommerce sector includes a large number of small and medium-sized sellers. These ‘long tail’ users urgently demand single service capabilities such as currency, rate, and timely cross-border payment tools. Third-party collection tools have been widely recognized for their ease of use, convenience, efficiency and comprehensiveness. 50.5% of sellers regard them as the most important payment method.
According to the survey data, LianLian Pay ranked first in China'scross-border export eCommerce sector with 51.4% brand familiarity. It also ranked first in the market among the common payment tools, at 23% coverage.
The RMB appreciated rapidly this quarter, reaching a record high for the year. According to the survey data, 87.3% of cross-border export sellers believe that exchange rate volatility impacts their finances, but 84.6% only use their judgment to deal with exchange rate fluctuations, or even just passively accept it. To resolve such pain points and needs, LianLianInternational launched a foreign exchange risk manager this year, which locks the exchange rate in advance, and helps sellers avoid the uncertainty caused by fluctuations. This service has filled in the blank for exchange rate risk management tools.
Ebrun analysts expressed that following years of development,cross-border export eCommerce has formed a mature and stable industry structure in China, and the use of third-party payment tools has become normal for practitioners.The financial service needs of the cross-border eCommerce sector are more complex and specialized than for traditional trade. The new demands of cross-border eCommerce sellers will become the main future development trend,gradually shifting from single-function payments to full-service cross-border financial tools.
